Financial arrangements for foster carers are often not clearly understood. This can be particularly true in relation to childcare.
Foster Carer’s allowances are classed as a self employed ‘remunerative carer’ income and taxed accordingly in the same way as a self employed person. Foster Carers can claim Child Tax Credit for their own children but not those they care for. They can also apply for the childcare element of Working Tax Credit, however they should also ask for specialist advice from the Inland Revenue with respect to the different categories of care order allowances and how they are treated within the context of any Working Tax Credits claim.
